Shares of Sepracor ( SEPR) soared Tuesday after the company issued fourth-quarter financial results that bulldozed Wall Street's expectations and enabled the company to enjoy its first profitable year. The Marlborough, Mass., maker of the sleep drug Lunesta and the asthma medication Xopenex issued 2006 earnings and revenue guidance that exceeded the consensus prediction among analysts. By early afternoon, Sepracor's stock was up $7.12, or 14.7%, to $55.50 on trading that was eight times the average daily volume for the past three months. The stock rose as high as $55.89. Sepracor reported a fourth-quarter profit of $37.2 million, or 32 cents a share, on revenue of $311.1 million. Analysts polled by Thomson First Call expected a profit of 5 cents a share on revenue of $282.9 million. For the same period last year, Sepracor lost $33.7 million, or 33 cents a share, on revenue of $131.4 million. The fourth-quarter results sent the full year into the black. Sepracor earned $4.97 million, or 4 cents a share, on revenue of $820.9 million last year. The consensus estimate called for a full-year loss of 42 cents a share on revenue of $793.7 million. "This should silence the multitude of bears," says Corey Davis of J.P. Morgan, who reaffirmed his overweight rating on the stock. Lunesta produced fourth-quarter sales of $144.9 million, and Xopenex contributed $158 million, both of which exceeded Davis's expectations. "We think there's plenty of upside here, given the recent surges in both market growth and share gains," says Davis, who doesn't own shares and whose firm has provided non-investment-banking services in the past 12 months. The bearish case is that Sepracor can't sustain the necessary growth in Lunesta prescriptions and sales while it spends heavily to promote the drug against bigger, deeper-pocketed opponents. Competitors include Sanofi-Aventis ( SNY), which sells Ambien and Ambien CR, and Takeda Pharmaceuticals, the maker of Rozerem.